Health Insurance

Health Insurance Information

Health insurance is a contract between an insurance provider (e.g. an insurance company ) and an individual. Health insurance helps to cover costs of medical expenses. Below are some health insurance terms and their definitions:

Premium: The amount the policyholder pays to the health plan to purchase health coverage. This is usually a monthly premium.

Deductible: The amount that the insured must pay out of pocket before the health insurer pays its share. For example, policyholders might have to pay a $500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. However, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.

Co-payment: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $25 co-payment for a doctor's visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.

Coinsurance: Instead of, or in addition to, paying a fixed amount up front (a co-payment), the coinsurance is a percentage of the total cost that insured person may also pay. For example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. If there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain.

Exclusions: Not all services are covered. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.

Explanation of benefits: A document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined.

Prescription drug plans are a form of insurance offered through some health insurance plans, but the amount of coverage and restrictions varies by benefit plan and company.

Blue Cross Blue Shield of North Dakota is an independent licensee of the Blue Cross & Blue Shield Association